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[LOGO]
Proxy
Statement
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[LOGO]
German
American Bancorp
Prospectus
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Page
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QUESTIONS
AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING
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1
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SUMMARY
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5
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The
Companies
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5
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Special
Meeting of Shareholders; Required Vote
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5
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The
Merger and the Merger Agreement
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6
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What
PCB Holding Shareholders Will Receive in the Merger
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6
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Opinion
of PCB Holding's Financial Advisor
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6
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Recommendation
of PCB Holding Board of Directors
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6
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Regulatory
Approvals
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6
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Conditions
to the Merger
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7
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Termination
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7
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Termination
Fee
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7
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Interests
of Officers and Directors in the Merger That are Different From
Yours
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7
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Accounting
Treatment of the Merger
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8
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Certain
Differences in Shareholder Rights
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8
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Dissenters'
Rights
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8
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Tax
Consequences of the Merger
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8
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SELECTED
HISTORICAL FINANCIAL DATA OF GERMAN AMERICAN
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9
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PER
SHARE EQUIVALENT INFORMATION
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10
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RISK
FACTORS
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11
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CAUTION
ABOUT FORWARD-LOOKING STATEMENTS
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13
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SPECIAL
MEETING OF PCB HOLDING SHAREHOLDERS
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14
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Date,
Place, Time and Purpose
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14
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Who
Can Vote at the Meeting
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14
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Quorum;
Vote Required
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14
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Voting
and Revocability of Proxies
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14
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Participants
in Peoples Community Bank's 401(k) Plan
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15
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Solicitation
of Proxies
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15
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RIGHTS
OF DISSENTING SHAREHOLDERS
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16
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DESCRIPTION
OF THE MERGER
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18
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Background
of the Merger
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18
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PCB
Holding's Reasons for the Merger and Recommendation of the Board
of
Directors
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19
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German
American's Reasons for the Merger
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20
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Opinion
of PCB Holding's Financial Advisor
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21
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Accounting
Treatment
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24
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Tax
Consequences of the Merger
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24
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Regulatory
Matters Relating to the Merger
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27
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Interests
of Certain Persons in the Merger
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27
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Restrictions
on Resale of Shares of German American Common Stock
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28
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DESCRIPTION
OF THE MERGER AGREEMENT
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29
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General
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29
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Time
of Completion
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29
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Consideration
to be Received in the Merger
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29
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Exchange
of Certificates
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30
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Conduct
of Business Pending the Merger and Certain Covenants
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31
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Representations
and Warranties
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33
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Conditions
to Completion of the Merger
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34
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Termination
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35
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Termination
Fee
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36
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Amendment
and Waiver
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36
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Management
and Operations After the Mergers
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36
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Employee
Benefit Matters
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36
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Expenses
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37
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DESCRIPTION
OF GERMAN AMERICAN
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37
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DESCRIPTION
OF GERMAN AMERICAN EQUITY SECURITIES
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37
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Common
Stock
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37
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Preferred
Share Purchase Rights
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37
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DESCRIPTION
OF PCB HOLDING
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38
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SECURITIES
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF PCB
HOLDING
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40
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COMPARISON
OF RIGHTS OF PCB HOLDING SHAREHOLDERS AND GERMAN AMERICAN
SHAREHOLDERS
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41
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Authorized
Capital Stock
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41
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Advance
Notice Requirements for Presentation of Business and Nominations
of
Directors at Annual Meetings of Shareholders
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41
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Number
of Board of Directors
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42
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Amendment
of Articles of Incorporation and By-Laws
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43
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Transactions
with Interested Security Holders
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43
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Control
Share Acquisition
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44
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German
American Shareholder Rights Plan
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45
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Annual
Meeting of Shareholders
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45
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Special
Meetings of Shareholders
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45
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Notice
of Shareholder Meetings
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46
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Indemnification
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46
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Removal
of Directors
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46
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Preemptive
Rights
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46
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Rights
of Dissenting Shareholders
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47
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LEGAL
MATTERS
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48
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EXPERTS
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48
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SHAREHOLDER
PROPOSALS
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48
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WHERE
YOU CAN FIND MORE INFORMATION
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49
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INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
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49
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Annex
A
Agreement and Plan of Reorganization
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Annex
B Fairness
Opinion of Keefe, Bruyette & Woods, Inc.
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Annex
C Chapter
44 of the Indiana Business Corporation Law (Dissenters'
Rights)
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Q:
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What
am I being asked to vote on? What is the proposed
transaction?
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A:
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You
are being asked to vote on the approval of a merger agreement
that
provides for German American's acquisition of PCB Holding. As
a result of
the merger, PCB Holding will cease to exist and you will become
a
shareholder of German American.
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Q:
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What
will I be entitled to receive in the
merger?
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A:
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If
the merger is completed, your shares of PCB Holding common stock
will be
converted into the right to receive shares of German American
common stock
and cash. Each share of PCB Holding common stock will be converted
into
the right to receive 0.7143 shares of German American common
stock and
$9.00 in cash, without interest, subject to possible downward
adjustment
(discussed
in more detail in the next Q and A). German American will not
issue fractional shares in the merger. Instead, you will receive
a cash
payment, without interest, for the value of any fraction of a
share of
German American common stock that you would otherwise be entitled
to
receive. Preferred share purchase rights are attached to and
trade with
shares of German American common stock. Any value attributable
to the
preferred share purchase rights is reflected in the value of
the shares of
German American common stock. See "DESCRIPTION OF THE MERGER
AGREEMENT—Consideration to be Received in the Merger" on
page 29
and "DESCRIPTION OF GERMAN AMERICAN EQUITY SECURITIES" on page
37.
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Q:
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Can
the merger consideration payable by German American be
adjusted?
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A:
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Yes.
The cash payment of $9.00, or the "cash consideration," will
be decreased
in the event that the net worth of PCB Holding (as adjusted in
accordance
with the merger agreement) is less than $4,825,000 as of the
end of the
month prior to the month in which the closing of the merger occurs.
The
adjustment to the cash consideration will be equal to the amount
by which
$4,825,000 exceeds the adjusted net worth of PCB Holding, divided
by the
number of shares of PCB Holding common stock outstanding at the
effective
time of the merger. In the event that PCB Holding's adjusted
net worth is
equal to or more than $4,825,000, there will not be any adjustment
of the
amount of the cash consideration. Based
on PCB Holding's net worth as of June 30, 2005, and certain other
assumptions, PCB Holding estimates that, if the merger closes
on
September 30, 2005, the cash payment per share of PCB Holding
common stock
will be approximately $8.73. See "DESCRIPTION OF THE MERGER
AGREEMENT - Consideration to be Received in the Merger" on page
29.
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Q:
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Can
I receive fractional shares of German American common stock for
my shares
of PCB Holding common stock?
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A:
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No.
You will not receive any fractional shares of German American
common
stock. Instead of fractional shares, you will receive a cash
payment in an
amount equal to the product of (i) the fraction of a share
of German
American common stock to which you are entitled, multiplied by
(ii) the NASDAQ Official Closing Price of a share of German
American
common stock as provided by NASDAQ on the last trading day before
the
closing date of the merger.
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Q:
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Am
I entitled to dissenters' rights?
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A:
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Yes.
Indiana law provides you with dissenters' rights in the merger.
This means
that you are legally entitled to receive payment in cash of the
fair value
of your shares, excluding any appreciation in value that results
from the
merger. To exercise your dissenters' rights you must deliver
written
notice of your intent to demand payment for your shares to PCB
Holding at
or before the special meeting of PCB Holding shareholders and
you must not
vote in favor of the merger. Notices should be addressed to Carl
D. Smith,
PCB Holding Company, 819 Main Street, Tell City, Indiana 47586.
Your
failure to follow exactly the procedures specified under Indiana
law will
result in the loss of your dissenters' rights. A copy of the
dissenters'
rights provisions of Indiana law is provided as Annex C
to this
document. See " RIGHTS OF DISSENTING SHAREHOLDERS" on page 16.
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Q:
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Why
do PCB Holding and German American want to
merge?
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A:
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PCB
Holding believes that the proposed merger will provide PCB
Holding
shareholders with substantial benefits, and German American
believes that
the merger will further its strategic growth plans. As a larger
company,
German American can provide the capital and resources that
PCB Holding
needs to compete more effectively and to offer a broader array
of products
and services to better serve its banking customers. To review
the reasons
for the merger in more detail, see "DESCRIPTION OF THE MERGER—German
American's Reasons for the Merger" on page 20 and
"DESCRIPTION OF THE MERGER—PCB Holding's Reasons for the Merger and
Recommendation of the Board of Directors" on page 19.
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Q:
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What
vote is required to adopt the merger
agreement?
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A:
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Holders
of a majority of the issued and outstanding shares of PCB Holding
common
stock must vote in favor of the proposal to adopt the merger
agreement.
All of PCB Holding's directors who own shares of PCB Holding
common stock
have agreed to vote their shares in favor of the merger at
the special
meeting. The directors owned 26,611 of the outstanding shares
of PCB
Holding common stock, or approximately 8.1%, on the record
date for the
special meeting, not including shares that may be acquired
upon the
exercise of stock options. German American shareholders will
not be voting
on the merger agreement. See "DESCRIPTION OF THE MERGER—Interests of
Certain Persons in the Merger" on page 27.
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Q:
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When
and where is the PCB Holding special
meeting?
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A:
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The
special meeting of PCB Holding shareholders is scheduled to
take place at
the Hoosier Heights Country Club, located at Highway 237, Tell
City,
Indiana 47586, at 10:00
a.m., local time, on September 14, 2005.
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Q:
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Who
is entitled to vote at the PCB Holding special
meeting?
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A:
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Holders
of shares of PCB Holding common stock at the close of business
on July
20, 2005, which is the record date, are entitled to
vote on the
proposal to adopt the merger agreement. As of the record date,
328,265
shares of PCB Holding common stock were outstanding and entitled
to
vote.
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Q:
|
If
I plan to attend the PCB Holding special meeting in person,
should I still
grant my proxy?
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A:
|
Yes.
Whether or not you plan to attend the PCB Holding special meeting,
you
should grant your proxy as described in this proxy statement/prospectus.
The failure of a PCB Holding shareholder to vote in person
or by proxy
will have the same effect as a vote "AGAINST" adoption of the
merger
agreement.
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Q:
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What
is the recommendation of the PCB Holding board of
directors?
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A:
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The
PCB Holding board of directors has determined that the merger
agreement
and the merger contemplated by the merger agreement are advisable,
fair
to, and in the best interests of, PCB Holding and its shareholders.
Therefore, the PCB Holding board of directors unanimously recommends
that
you vote "FOR" the proposal to adopt the merger
agreement.
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Q:
|
What
do I need to do now to vote my shares of PCB Holding common
stock?
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A:
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After
you have carefully read and considered the information contained
in this
proxy statement/prospectus, please complete, sign, date and
mail your
proxy form in the enclosed return envelope as soon as possible.
This will
enable your shares to be represented at the special meeting.
You may also
vote in person at the special meeting. If you do not return
a properly
executed proxy form and do not vote at the special meeting,
this will have
the same effect as a vote against the adoption of the merger
agreement. If
you sign, date and send in your proxy form, but you do not
indicate how
you want to vote, your proxy will be voted in favor of adoption
of the
merger agreement. You may change your vote or revoke your proxy
prior to
the special meeting by filing with the Secretary of PCB Holding
a duly
executed revocation of proxy, submitting a new proxy form with
a later
date, or voting in person at the special meeting.
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Q:
|
If
my shares are held in "street name" by my broker, will my broker
automatically vote my shares for me?
|
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|
A:
|
No.
Your broker will not be able to vote your shares of PCB Holding
common
stock on the proposal to adopt the merger agreement unless
you provide
instructions on how to vote. Please instruct your broker how
to vote your
shares, following the directions that your broker provides.
If you do not
provide instructions to your broker on the proposal to adopt
the merger
agreement, your shares will not be voted, and this will have
the effect of
voting against the adoption of the merger agreement. Please
check the
voting form used by your broker to see if it offers telephone
or Internet
voting.
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Q:
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What
are the tax consequences of the merger to
me?
|
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A:
|
German
American and PCB Holding expect the merger to qualify as a
"reorganization" for U.S. federal income tax purposes. If the
merger
qualifies as a reorganization, then, in general, for U.S. federal
income
tax purposes:
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•
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PCB
Holding shareholders will recognize gain (but not loss) in
an amount equal
to the lesser of (i) the amount of cash received in
the merger and
(ii) the excess, if any, of (a) the sum of
the amount of cash
and the fair market value of the shares of German American
common stock
received in the merger over (b) the PCB Holding shareholder's
aggregate tax basis in its shares of PCB Holding common stock
surrendered
in exchange for shares of German American common stock and
cash;
and
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•
|
PCB
Holding shareholders will recognize gain or loss, if any,
on any
fractional shares of German American common stock for which
cash is
received.
|
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|
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To
review the tax consequences of the merger to PCB Holding
shareholders in
greater detail, please see the section "DESCRIPTION OF THE
MERGER—Tax
Consequences of the Merger" beginning on page 24.
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Q:
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When
is the merger expected to be completed?
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A:
|
We
will try to complete the merger as soon as possible.
Before that happens,
the merger agreement must be adopted by PCB Holding's
shareholders and we
must obtain the necessary regulatory approvals. Assuming
shareholders vote
at least a majority of the issued and outstanding shares
of PCB Holding
common stock in favor of the merger agreement and we
obtain the other
necessary approvals, we expect the merger to close
on September 30,
2005 and to be effective on October 1, 2005.
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Q:
|
Is
completion of the merger subject to any conditions besides
shareholder
approval?
|
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|
A:
|
Yes.
The transaction must receive the required regulatory
approvals, and there
are other customary closing conditions that must be satisfied.
To review
the conditions of the merger in more detail, see "DESCRIPTION
OF THE
MERGER AGREEMENT—Conditions to Completion of the Merger" on page
34.
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Q:
|
How
do I exchange my PCB Holding stock
certificates?
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A:
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Promptly
following the merger, German American's transfer agent
will send you a
letter indicating how and where to surrender your stock
certificates in
exchange for the merger consideration. Please
do not send your PCB Holding stock certificates with
your proxy
card.
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Q:
|
Who
can answer my other questions?
|
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A:
|
If
you have more questions about the merger, or how to submit
your proxy, or
if you need additional copies of this proxy statement/prospectus
or the
enclosed proxy form, you should contact Carl D. Smith,
President of PCB
Holding Company, at (812) 547-7094.
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| • |
adoption
of the merger agreement at the special meeting by at a majority of
the
issued and outstanding shares of PCB Holding common
stock;
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| • |
approval
of the transaction by the appropriate regulatory authorities;
and
|
| • |
the
representations and warranties made by the parties in the merger
agreement
must be true as of the closing date of the merger, except for such
changes
as have not had, and can not reasonably be expected to have, any
effect
that is material and adverse to the financial position, results of
operations or business of the relevant
party.
|
| • |
the
merger has not been consummated by March 31, 2006;
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| • |
PCB
Holding shareholders do not adopt the merger agreement at the PCB
Holding
special meeting;
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| • |
there
is a breach by the other party of any representation or warranty
contained
in the merger agreement (other than those breaches that do not have
a
material adverse effect on the other party), which cannot be cured,
or has
not been cured within 30 days after the giving of written notice
to such
party of such breach; or
|
| • |
there
is a breach by the other party in any material respect of any of
the
covenants or agreements contained in the merger agreement, which
breach
cannot be cured, or has not been cured within 30 days after the giving
of
written notice to the other party of such
breach.
|
| • |
PCB
Holding shareholders will recognize gain (but not loss) in an amount
equal
to the lesser of (i) the amount of cash received in the merger
and
(ii) the excess, if any, of (a) the sum of the amount
of cash
and the fair market value of the shares of German American common
stock
received in the merger over (b) the PCB Holding shareholder's
aggregate tax basis in its shares of PCB Holding common stock surrendered
in exchange for shares of German American common stock and cash;
and
|
| • |
PCB
Holding shareholders will recognize gain or loss, if any, on any
fractional shares of German American common stock for which cash
is
received.
|
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(in
thousands)
|
December
31,
|
Six
Months Ended
June
30,
|
||||||||||||||||||||
|
2004
|
2003
|
2002
|
2001
|
2000
|
2005
|
2004
|
||||||||||||||||
|
Summary
of Operations:
|
||||||||||||||||||||||
|
Interest
Income
|
$
|
47,710
|
$
|
50,619
|
$
|
60,494
|
$
|
71,069
|
$
|
79,319
|
$
|
24,176
|
$
|
23,664
|
||||||||
|
Interest
Expense
|
16,471
|
21,084
|
28,492
|
38,917
|
45,646
|
8,202
|
8,451
|
|||||||||||||||
|
Net
Interest Income
|
31,239
|
29,535
|
32,002
|
32,152
|
33,673
|
15,974
|
15,213
|
|||||||||||||||
|
Provision
for Loan Losses
|
2,015
|
811
|
1,115
|
660
|
2,231
|
1,173
|
1,240 | |||||||||||||||
|
Net
Interest Income after Provision for Loan Losses
|
29,224
|
28,724
|
30,887
|
31,492
|
31,442
|
14,801
|
13,973
|
|||||||||||||||
|
Non-interest
Income
|
9,620
|
(1)
|
12,934
|
9,509
|
9,772
|
2,543
|
(4)
|
7,198
|
6,918
|
|||||||||||||
|
Non-interest
Expense
|
30,609
|
32,219
|
(2)
|
28,967
|
29,308
|
28,238
|
15,646
|
15,714
|
||||||||||||||
|
Income
before Income Taxes
|
8,235
|
9,439
|
11,429
|
11,956
|
5,747
|
6,353
|
5,177
|
|||||||||||||||
|
Income
Tax Expense
|
996
|
1,271
|
1,987
|
2,763
|
459
|
1,534
|
893 | |||||||||||||||
|
Net
Income
|
$
|
7,239
|
$
|
8,168
|
$
|
9,442
|
$
|
9,193
|
$
|
5,288
|
$
|
4,819 |
$
|
4,284
|
||||||||
|
Period-end
Balances:
|
||||||||||||||||||||||
|
Total
Assets
|
$
|
942,094
|
$
|
925,946
|
$
|
957,005
|
$
|
1,015,111
|
$
|
1,079,808
|
$
|
909,227
|
$
|
930,459
|
||||||||
|
Total
Loans, Net of Unearned Income
|
629,793
|
611,866
|
610,741
|
657,166
|
709,744
|
(4)
|
625,443
|
621,216
|
||||||||||||||
|
Total
Deposits
|
750,383
|
717,133
|
707,194
|
726,874
|
735,570
|
709,598
|
722,058
|
|||||||||||||||
|
Total
Long-term Debt
|
69,941
|
76,880
|
(2)
|
121,687
|
156,726
|
182,370
|
60,834
|
|
79,273
|
|
||||||||||||
|
Total
Shareholders' Equity
|
83,669
|
83,126
|
(3)
|
104,519
|
102,209
|
97,260
|
83,689 |
80,524
|
||||||||||||||
|
Per
Share Data(5):
|
||||||||||||||||||||||
|
Net
Income
|
$
|
0.66
|
$
|
0.73
|
(3)
|
$
|
0.79
|
$
|
0.76
|
$
|
0.44
|
$
|
0.44
|
$
|
0.39
|
|||||||
|
Cash
Dividends
|
0.56
|
0.53
|
0.51
|
0.48
|
0.45
|
0.28
|
0.28 | |||||||||||||||
|
Book
Value at Period-end
|
|
$
|
7.68
|
|
$
|
7.60
|
(3)
|
$
|
8.72
|
$
|
8.44
|
$
|
8.05
|
$
|
7.73
|
$
|
7.39
|
|||||
| (1) |
In
2004, German American recognized a $3.7 million non-cash pre-tax
charge
(which reduced non-interest income) for the other-than-temporary
decline
in value of its Federal Home Loan Mortgage Corp. and Federal National
Mortgage Association preferred stock
portfolio.
|
| (2) |
In
2003, German American prepaid $40.0 million of Federal Home Loan
Bank
borrowings within its mortgage banking segment. The prepayment fees
associated with the extinguishment of these borrowings totaled $1.9
million.
|
| (3) |
In
March 2003, German American purchased 1,110,444 (approximately 9%
of the
number of shares that were then outstanding) of its common shares
at
$19.05 per share pursuant to a self tender offer at a total cost,
including fees and expenses incurred in connection with the offer,
of
approximately $21.4 million.
|
| (4) |
In
2000, German American reclassified $69.8 million of sub-prime,
out-of-market residential mortgage loans as held-for-sale. The difference
between book value and market value resulted in a $5.2 million allowance
for market loss on loans held-for-sale.
|
| (5) |
Share
and per share data exclude the dilutive effect of stock options
and have been retroactively adjusted to give effect to stock
dividends.
|
|
German
American
|
PCB
Holding
|
Per
Equivalent Share of PCB Holding Common Stock
|
||||||||
|
Earnings
per share
|
||||||||||
|
Year
Ended December 31, 2004
|
$
|
0.66
|
$
|
0.17
|
$
|
0.47
|
||||
|
Six
Months Ended June 30, 2005
|
$
|
0.44
|
$
|
0.21
|
|
$
|
0.31
|
|||
|
Diluted
earnings
per share
|
||||||||||
|
Year
Ended December 31, 2004
|
$
|
0.66
|
$
|
0.17
|
$
|
0.47
|
||||
|
Six
Months Ended June 30, 2005
|
$
|
0.44
|
$
|
0.20
|
|
$
|
0.31
|
|||
|
Cash
dividends per share
|
||||||||||
|
Year
Ended December 31, 2004
|
$
|
0.56
|
$
|
0.24
|
$
|
0.40
|
||||
|
Six
Months Ended June 30, 2005
|
$
|
0.28
|
$
|
0.12
|
$
|
0.20
|
||||
|
Book
value per share
|
||||||||||
|
At
December 31, 2004
|
$
|
7.68
|
$
|
15.47
|
$
|
5.49
|
||||
|
At
June 30, 2005
|
$
|
7.73
|
$
|
15.56
|
$
|
5.52
|
||||
|
German
American Common Stock
|
Equivalent
Price Per Share of PCB Holding Common Stock
|
||||||
|
May
23, 2005
|
$
|
13.61
|
$
|
18.72
|
|||
|
August
5, 2005
|
$ | 13.83 |
$
|
18.88 | |||
| • |
integrating
personnel with diverse business
backgrounds;
|
| • |
combining
different corporate cultures; and
|
| • |
retaining
key employees.
|
| • |
German
American and PCB Holding have entered into agreements with Carl D.
Smith
and Clarke A. Blackford that terminate their existing employment
agreements in exchange for a cash
payment.
|
| • |
First
State Bank has entered into an employment agreement with Mr.
Smith.
|
| • |
German
American has entered into a non-compete agreement with Mr.
Blackford.
|
| • |
Daniel
P. Lutgring, Mark L. Ress and James G. Tyler, current directors of
PCB
Holding, will be appointed to the board of directors of First State
Bank.
|
| • |
German
American is obligated under the merger agreement to provide continuing
indemnification to the directors and officers of PCB Holding and
its
subsidiaries, and to provide such directors and officers with directors'
and officers' liability insurance for a period of six
years.
|
| • |
filing
with the Secretary of PCB Holding a duly executed revocation of
proxy;
|
| • |
submitting
a new proxy with a later date; or
|
| • |
voting
in person at the special meeting.
|
| • |
The
expected results from continuing to operate as an independent community
banking institution, and the likely benefits to shareholders, compared
with the value of the merger consideration offered by German
American.
|
| • |
Information
concerning the businesses, earnings, operations, financial condition
and
prospects of PCB Holding and German American. PCB Holding's board
of
directors took into account the results of PCB Holding's due diligence
review of German American.
|
| • |
The
opinion rendered by KBW, as financial advisor to PCB Holding, that
the
merger consideration is fair, from a financial standpoint, to PCB
Holding
shareholders.
|
| • |
The
terms of the merger agreement and the structure of the merger, including
the fact that PCB Holding shareholders will receive a combination
of cash
and shares of German American common stock in exchange for their
shares.
|
| • |
The
review made by PCB Holding's board of directors of various pricing
and
other data in an attempt to establish PCB Holding's value in a merger
or
sales transaction.
|
| • |
The
fact that KBW solicited offers to acquire PCB Holding and that German
American offered the highest value to PCB Holding
shareholders.
|
| • |
The
fact that the market for shares of German American common stock is
substantially broader than the current market for shares of PCB Holding
common stock.
|
| • |
PCB
Holding shareholders will experience an increase in dividends, based
on
German American's current dividend rate and the exchange
ratio.
|
| • |
The
current and prospective economic, competitive and regulatory environment
facing PCB Holding and independent community banking institutions
generally.
|
| • |
The
board of directors' assessment that PCB Holding would better serve
the
convenience and needs of its customers and the communities that it
serves
through affiliation with a financial institution such as German American
that has a larger infrastructure, wider selection of financial products
and services and larger asset base.
|
| • |
German
American's statement that it expects substantial continuity of employment
of the employees of Peoples Community Bank with First State Bank
or other
subsidiaries of German American.
|
| • |
The
likelihood of German American receiving regulatory approval of the
merger.
|
| • |
The
likelihood of PCB Holding shareholders approving the
merger.
|
| • |
PCB
Holding's community banking orientation and its compatibility with
German
American and its subsidiaries.
|
| • |
Management's
review of the business, operations, earnings, and financial condition,
including capital levels and asset quality of PCB
Holding.
|
| • |
The
likelihood of regulators approving the merger without undue conditions
or
delay.
|
| • |
reviewed
the financial and business data which PCB Holding supplied to it,
including annual reports for the years ended December 31, 2004, 2003
and
2002, proxy statements for the years ended December 31, 2004 and
2003 and
PCB Holding's unaudited financial information for the quarter ended
March
31, 2005;
|
| • |
reviewed
German American's annual report and proxy statement for the years
ended
December 31, 2004, 2003 and 2002 and unaudited financial statements
for
the period ended March 31, 2005;
|
| • |
discussed
with PCB Holding's senior management board of directors the current
position and prospective outlook for PCB
Holding;
|
| • |
considered
historical quotations and the prices of recorded transactions in
shares of
PCB Holding common stock and reviewed the financial and stock market
data
of other publicly traded thrift institutions, particularly Midwestern
thrifts with assets below $100
million;
|
| • |
considered
historical quotations and prices of recorded transactions in shares
of
German American common stock and reviewed the financial and stock
market
data of other publicly traded bank institutions, particularly Midwestern
banks with assets between $750 million and $1.5 billion;
and
|
| • |
reviewed
the financial and structural terms of several other recent transactions
involving mergers and acquisitions of thrift institutions or proposed
changes of control of comparably situated
companies.
|
|
Buying
Institution
|
Selling
Institution
|
|
|
Blue
River Bancshares, Inc.
|
Unified
Banking Company
|
|
|
Community
Bank System Inc.
|
Peoples
Bankcorp, Inc.
|
|
|
First
Federal Bank of LA
|
First
Allen Parish Bancorp
|
|
|
Garfield
Acquisition Corp.
|
Lennox
Savings Bank
|
|
|
Generations
Bancorp
|
Generations
Bank
|
|
|
Great
River Holding Co.
|
First
Federal Holding Co. Of Morris
|
|
|
Liberty
Bancshares, Inc.
|
StateFed
Financial Corp.
|
|
|
MIVI
Acquisition Corp.
|
Mississippi
View Holding Co.
|
|
|
NS&L
Acquisition Corp.
|
NS&L
Bancorp, Inc.
|
|
|
Standard
Bancshares, Inc.
|
Security
Financial Bancorp, Inc.
|
|
|
Patapsco
Bancorp Inc.
|
Parkville
FSB
|
|
|
Teche
Holding Co.
|
St.
Landry Financial Corp.
|
|
|
First
BancTrust Corp.
|
Rantoul
First Bank SB
|
|
|
Founders
Group Inc.
|
Vermillion
Bancorp Inc.
|
|
Price
to Book Ratio (%)
|
Price
to Tangible Book Ratio (%)
|
Price
to last 12 months earnings (x)
|
Core
Deposit Premium (%)
|
||||||||||
|
Low
value
|
119.2
|
119.2
|
7.5x
|
2.9
|
|||||||||
|
Median
value
|
133.8
|
133.8
|
22.4x
|
5.9
|
|||||||||
|
High
value
|
180.7
|
180.7
|
40.9x
|
15.5
|
|||||||||
|
Implied
value of GABC offer*
|
127.1
|
127.1
|
NM**
|
6.1
|
|||||||||
| * |
Based
on closing price of shares of German American common stock on May
23,
2005.
|
| ** |
NM
= not meaningful, as PCB Holding had a loss for the 12 months ended
March
31, 2005.
|
|
Discount
Rate
|
Terminal
Multiple - P/E
|
|||||
|
15.0x
|
16.0x
|
17.0x
|
18.0x
|
19.0x
|
||
|
13.0%
|
$14.49
|
$15.13
|
$15.76
|
$16.39
|
$17.03
|
|
|
12.5%
|
$14.71
|
$15.35
|
$16.00
|
$16.65
|
$17.30
|
|
|
12.0%
|
$14.93
|
$15.59
|
$16.25
|
$16.91
|
$17.57
|
|
|
11.5%
|
$15.15
|
$15.83
|
$16.50
|
$17.18
|
$17.86
|
|
|
11.0%
|
$15.38
|
$16.07
|
$16.77
|
$17.46
|
$18.15
|
|
|
Discount
Rate
|
Terminal
Multiple - Price to Book
|
|||||
|
110%
|
120%
|
130%
|
140%
|
150%
|
||
|
13.0%
|
$10.31
|
$10.84
|
$11.37
|
$11.90
|
$12.43
|
|
|
12.5%
|
$10.49
|
$11.03
|
$11.58
|
$12.12
|
$12.67
|
|
|
12.0%
|
$10.67
|
$11.23
|
$11.79
|
$12.35
|
$12.91
|
|
|
11.5%
|
$10.86
|
$11.43
|
$12.01
|
$12.58
|
$13.16
|
|
|
11.0%
|
$11.05
|
$11.64
|
$12.23
|
$12.82
|
$13.41
|
|
| • |
German
American and PCB Holding are able to deliver customary representations
to
German American's tax counsel;
|
| • |
there
is no adverse change in U.S. federal income tax law; and
|
| • |
the
aggregate fair market value of the German American common stock delivered
as consideration in the merger is equal to or greater than 40% of
the sum
of (i) the aggregate fair market value of such German American
common
stock; and (ii) the aggregate amount of cash that is considered
to be
merger consideration, including any cash that may be payable, directly
or
indirectly, by German American to PCB Holding shareholders who perfect
their appraisal rights.
|
| • |
additional
provisions for possible loan losses, if any, that may be deemed
necessary
to establish the allowance for loan losses at a level that is deemed
adequate, as of the closing date of the merger, under generally
accepted
accounting principles, consistently
applied;
|
| • |
accruals
for all of PCB Holding's fees, expenses and costs relating to the
merger
through and including the effective time of the merger, including
those
that might not be performed or earned or become payable until after
the
effective time (using best estimates on the closing date);
|
| • |
payments
to be made (and the costs of benefits to be provided) on and after
the
closing date pursuant to Carl D. Smith and Clarke A. Blackford under
the
employment agreement termination agreements described
elsewhere;
|
| • |
the
amount of any regular, semi-annual cash dividends not to exceed
$0.12 per
share of PCB Holding common stock which are declared prior to the
closing
date (to the extent not already reflected in the financial statements
of
Peoples as of the month end prior to the closing date of the
merger);
|
| • |
the
issuance of up to 31,734 shares of PCB Holding common stock upon
the
exercise of issued and outstanding stock options held by the employees
and
directors of PCB Holding and Peoples Community Bank (to the extent
not
already reflected in the financial statements of Peoples as of the
month
end prior to the closing date); and
|
| • |
costs
associated with the termination of PCB Holding's contract with Intrieve,
Incorporated.
|
| • |
certificates
representing the shares of German American's common stock (including
the
accompanying preferred share purchase rights) into which those shares
of
PCB Holding common stock have been
converted;
|
| • |
cash
in the amount of the cash consideration;
and
|
| • |
cash
in lieu of any fractional share of German American common
stock.
|
| • |
declaring
or paying any dividends on shares of PCB Holding common stock or
making
any other distribution to shareholders, except for regular semi-annual
cash dividends not to exceed $0.12 per share on PCB Holding common
stock
on substantially the same record and payment date schedule as PCB
Holding
has utilized in the past and declared prior to the closing
date;
|
| • |
issuing
or agreeing to issue any stock (except for the issuance of shares
upon the
exercise of stock options) or any options, warrants or other rights
to
subscribe for or purchase common or any other capital stock or securities
convertible into or exchangeable for any capital
stock;
|
| • |
redeeming,
purchasing or otherwise acquiring any of its outstanding shares of
common
or other capital stock, or agreeing to do
so;
|
| • |
effecting
a stock split, reverse split, reclassification or other similar change
in
any common or other capital stock or otherwise reorganizing or
recapitalizing;
|
| • |
changing
its articles of incorporation or
bylaws;
|
| • |
paying
or agreeing to pay any bonus, additional compensation (other than
ordinary
and normal bonuses and salary increases consistent with past practices)
or
severance benefit or otherwise making any changes out of the ordinary
course of business with respect to the fees or compensation payable
or to
become payable to consultants, advisors, investment bankers, brokers,
attorneys, accountants, directors, officers or
employees;
|
| • |
adopting
or making any change in any employee benefit plan or other arrangement
or
payment made to, for or with any of such consultants, advisors, investment
bankers, brokers, attorneys, accountants, directors, officers or
employees;
|
| • |
borrowing
or agreeing to borrow any material amount of funds except in the
ordinary
course of business, or directly or indirectly guaranteeing or agreeing
to
guarantee any material obligations of others except in the ordinary
course
of business or pursuant to outstanding letters of
credit;
|
| • |
making
or committing to make any new loan or issuing or committing to issue
any
new letter of credit or any new or additional discretionary advance
under
any existing line of credit, or purchasing or agreeing to purchase
any
interest in a loan participation, in aggregate principal amounts
that
would cause the credit extensions or commitments of Peoples Community
Bank
to any one borrower (or group of affiliated borrowers) to exceed
$100,000;
|
| • |
purchasing
or otherwise acquiring any investment security for their own accounts,
or
selling any investment security owned by either of them which is
designated as held-to-maturity, or engaging in any activity that
would
require the establishment of a trading account for investment securities;
|
| • |
increasing
or decreasing the rate of interest paid on time deposits, or on
certificates of deposit, except in a manner and pursuant to policies
consistent with past practices;
|
| • |
entering
into or amending any material agreement, contract or commitment out
of the
ordinary course of business;
|
| • |
except
in the ordinary course of business, placing on any of their assets
or
properties any mortgage, pledge, lien, charge, or other encumbrance;
|
| • |
except
in the ordinary course of business, canceling, releasing, compromising
or
accelerating any material indebtedness owing to PCB Holding or Peoples
Community Bank, or any claims which either of them may possess, or
voluntarily waiving any material rights with respect thereto;
|
| • |
selling
or otherwise disposing of any real property or any material amount
of any
personal property other than properties acquired in foreclosure or
otherwise in the ordinary course of collection of indebtedness;
|
| • |
foreclosing
upon or otherwise taking title to or possession or control of any
real
property without first obtaining a phase one environmental report
thereon,
prepared by a reliable and qualified person or firm reasonably acceptable
to German American, which does not indicate the presence of material
quantities of pollutants, contaminants or hazardous or toxic waste
materials on the property;
|
| • |
committing
any act or failing to do any act which will cause a material breach
of any
material agreement, contract or commitment;
|
| • |
violating
any law, statute, rule, governmental regulation or order, which violation
might have a material adverse effect on its business, financial condition,
or earnings;
|
| • |
purchasing
any real or personal property or making any other capital expenditure
where the amount paid or committed therefor is in excess of $10,000
other
than purchases of property made in the ordinary course of business
in
connection with loan collection activities or foreclosure sales in
connection with any of PCB Holding's or Peoples Community Bank's
loans;
|
| • |
issuing
certificate(s) for shares of PCB Holding common stock to any PCB
Holding
shareholder in replacement of certificate(s) claimed to have been
lost or
destroyed without first obtaining from such shareholder(s), at the
expense
of such shareholder(s), a surety bond from a recognized insurance
company
in an amount that would indemnify PCB Holding (and its successors)
against
loss on account of such lost or destroyed certificate(s) (in an amount
not
less than the amount that German American's transfer agent would
require
in the case of lost or destroyed stock certificates of equal value
of
German American common stock), and obtaining a usual and customary
affidavit of loss and indemnity agreement from such shareholder(s);
|
| • |
holding
a special, regular or annual meeting (or take action by consent in
lieu
thereof) of the board of directors or the sole shareholder of Peoples
for
the purpose of appointing or electing any new member to the board
of
directors of PCB Holding or of Peoples Community Bank (whether to
fill a
vacancy or otherwise) unless such new member is approved in advance
in
writing by German American; or
|
| • |
notifying
German American in writing of the occurrence of any matter or event
known
to PCB Holding that is, or is likely to become, materially adverse
to the
business, operations, properties, assets or financial condition of
PCB
Holding taken as a whole.
|
| • |
conducting
its business substantially in the manner as it is presently being
conducted and in the ordinary course of
business;
|
| • |
not
amending its articles of incorporation in any manner that requires
the
approval of shareholders of German American under the
IBCL;
|
| • |
not
failing to file, or cause its subsidiaries to file, all required
reports
with applicable regulatory authorities;
|
| • |
complying
with all laws, statutes, ordinances, rules or regulations applicable
to it
and to the conduct of its business, the noncompliance with which
results
or could result in a material adverse effect on the financial condition,
results of operations, business, assets or capitalization of German
American on a consolidated basis;
|
| • |
complying
in all material respects with each contract, agreement, commitment,
obligation, understanding, arrangement, lease or license to which
it is a
party by which it is or may be subject or bound, the breach of which
could
result in a material adverse effect on the financial condition, results
of
operations, business, assets or capitalization of German American
on a
consolidated basis; or
|
| • |
promptly
notifying PCB Holding in writing of the occurrence of any matter
or event
known to German American that is, or is likely to become, materially
adverse to the businesses, operations, properties, assets or condition
(financial or otherwise) of German American and its subsidiaries
on a
consolidated basis.
|
| • |
due
corporate organization and existence;
|
| • |
capitalization;
|
| • |
corporate
power and authority to enter into the merger and the merger
agreement;
|
| • |
organizational
documents;
|
| • |
subsidiaries;
|
| • |
financial
information;
|
| • |
agreements
with banking authorities;
|
| • |
litigation;
|
| • |
compliance
with laws; and
|
| • |
broker's,
finder's or other fees.
|
| • |
compliance
with SEC filing requirements, including internal control
requirements;
|
| • |
filing
of necessary reports with regulatory
authorities;
|
| • |
accuracy
of statements made and materials provided to the other party;
and
|
| • |
absence
of material adverse changes in financial condition since March 31,
2005.
|
| • |
employment
agreements;
|
| • |
filing
of reports;
|
| • |
loans
and investments;
|
| • |
employee
benefit plans;
|
| • |
title
to assets;
|
| • |
insurance;
|
| • |
environmental
matters;
|
| • |
material
contracts;
|
| • |
compliance
with Americans with Disabilities
Act;
|
| • |
control
over financial reporting
|
| • |
accuracy
of statements made and materials provided to the other party; and
|
| • |
no
third party options; and
|
| • |
absence
of material adverse changes in financial condition since December 31,
2004.
|
| • |
truth
of representations and warranties of PCB Holding in all material
respects
as of the closing date (except for such changes as have not had,
and can
not reasonably be expected to have, any effect that is material and
adverse to the financial position, results of operations or business
of
PCB Holding);
|
| • |
performance
by PCB Holding in all material respects of its agreements under the
merger
agreement;
|
| • |
approval
of the merger by PCB Holding
shareholders;
|
| • |
absence
of any restraining order, preliminary or permanent injunction or
other
order issued by a court of competent jurisdiction, or any proceeding
by
any bank regulatory authority, governmental agency or other person
seeking
any of the above;
|
| • |
receipt
of all necessary regulatory approvals (without burdensome
conditions);
|
| • |
receipt
of certain environmental reports (which have been received or for
which
German American has waived receipt as of the date of the mailing
of this
proxy statement/prospectus);
|
| • |
the
registration statement has been declared effective by the SEC and
continues to be effective as of the effective time;
|
| • |
receipt
from PCB Holding at closing of certain items set forth in the merger
agreement;
|
| • |
receipt
of a voting agreement executed by certain PCB Holding shareholders
set
forth in the merger agreement (which was received on May 23,
2005);
|
| • |
receipt
of employment agreement termination agreements entered into by certain
officers of PCB Holding as set forth in the merger agreement (which
were
received on May 23, 2005);
|
| • |
if
any PCB Holding shareholders have timely provided notice of their
intent
to exercise dissenter's rights under the IBCL, such notices do not
relate
to more than 10% of the number of shares of PCB Holding common stock
outstanding on the closing date; and
|
| • |
receipt
of a written tax opinion of the law firm of Ice Miller.
|
| • |
truth
of representations and warranties of German American in all material
respects as of the closing date (except for such changes as have
not had,
and can not reasonably be expected to have, any effect that is material
and adverse to the financial position, results of operations or business
of German American);
|
| • |
performance
by German American in all material respects of their agreements under
the
merger agreement;
|
| • |
approval
of the merger by PCB Holding
shareholders;
|
| • |
absence
of any restraining order, preliminary or permanent injunction or
other
order issued by a court of competent jurisdiction, or any proceeding
by
any bank regulatory authority, governmental agency or other person
seeking
any of the above;
|
| • |
receipt
of all necessary regulatory
approvals;
|
| • |
receipt
from German American at closing of certain items set forth in the
merger
agreement;
|
| • |
the
registration statement has been declared effective by the SEC and
continues to be effective as of the effective time;
and
|
| • |
receipt
of a written tax opinion of the law firm of Ice
Miller.
|
| • |
the
other party has breached any representation or warranty contained
in the
merger agreement (other than those breaches that do not have and
would not
reasonably be expected to have, individually or in the aggregate,
a
material adverse effect on the other party), which cannot be cured,
or has
not been cured within 30 days after the giving of written notice
to such
party of such breach;
|
| • |
the
other party has breached in any material respect any of the covenants
or
agreements contained herein, which breach cannot be cured, or has
not been
cured within 30 days after the giving of written notice to the other
party
of such breach;
|
| • |
any
of the conditions to the obligations of such party are not satisfied
or
waived on or prior to the closing date, immediately upon delivery
of
written notice thereof to the other party on the closing
date;
|
| • |
PCB
Holding shareholders do not adopt the merger agreement at the PCB
Holding
special meeting;
|
| • |
in
the event of certain adverse regulatory
determinations;
|
| • |
the
merger has not been consummated by March 31, 2006;
or
|
| • |
the
other party has become part or subject to any memorandum of understanding,
cease and desist order, or civil money penalties imposed by any federal
or
state banking agency.
|
| • |
the
agreement is terminated due to the failure of the PCB Holding shareholders
to approve the merger agreement following the submission by any other
person or entity not a party to the merger agreement of an indication
of
interest to PCB Holding or Peoples Community Bank contemplating any
business combination; and
|
| • |
within
twelve months following such termination, PCB Holding or Peoples
Community
Bank accept a proposal for a business combination with any third
party.
|
|
PCB
Holding Common Stock
|
||||||||||
|
High
Closing Bid
|
Low
Closing Bid
|
Dividends
|
||||||||
|
2003
|
||||||||||
|
1st
Quarter
|
$
|
11.00
|
$
|
10.87
|
$
|
0.00
|
||||
|
2nd
Quarter
|
$
|
11.00
|
$
|
10.01
|
$
|
0.12
|
||||
|
3rd
Quarter
|
$
|
12.00
|
$
|
10.75
|
$
|
0.00
|
||||
|
4th
Quarter
|
$
|
12.00
|
$
|
12.00
|
$
|
0.12
|
||||
|
2004
|
||||||||||
|
1st
Quarter
|
$
|
12.50
|
$
|
12.00
|
$
|
0.00
|
||||
|
2nd
Quarter
|
$
|
13.50
|
$
|
12.25
|
$
|
0.12
|
||||
|
3rd
Quarter
|
$
|
13.50
|
$
|
13.50
|
$
|
0.00
|
||||
|
4th
Quarter
|
$
|
14.00
|
$
|
12.50
|
$
|
0.12
|
||||
|
2005
|
||||||||||
|
1st
Quarter
|
$
|
12.50
|
$
|
12.50
|
$
|
0.00
|
||||
|
2nd
Quarter
|
$
|
17.50
|
$
|
12.00
|
$
|
0.12
|
||||
|
3rd
Quarter
(through
August 3, 2005)
|
$
|
16.00
|
$
|
15.00
|
$
|
0.00
|
||||
| Name |
Number
of
Shares
Owned
(Excluding
Options)
|
Number
of Shares That May Be Acquired Within 60 Days by
Exercising
Options
|
Percent
of Total Common
Stock
Outstanding(4)
|
|||||||
|
David
L. Lasher
|
456
|
2,380
|
*
|
|||||||
|
Daniel
P. Lutgring
|
5,376
|
(1)
|
2,380
|
2.4
|
%
|
|||||
|
Mark
L. Ress
|
7,642
|
2,380
|
3.0
|
%
|
||||||
|
Carl
D. Smith
|
7,685
|
(2)
|
9,917
|
5.2
|
%
|
|||||
|
James
G. Tyler
|
5,452
|
(3)
|
2,380
|
2.4
|
%
|
|||||
|
All
Executive Officers and Directors
as a Group (6 persons)
|
29,175
|
29,354
|
15.9
|
%
|
||||||
|
*
|
Less
than 1%.
|
| (1) |
Includes
2,174 shares owned by a company controlled by Mr.
Lutgring.
|
| (2) |
Includes
998 shares owned by Mr. Smith's
spouse.
|
| (3) |
Includes
882 shares owned by Mr. Tyler's
spouse.
|
| (4) |
Based
on 328,265 shares of PCB Holding common stock outstanding and entitled
to
vote as of June 30, 2005.
|
| • |
German
American's Annual Report on Form 10-K for the year ended
December 31, 2004, as amended;
|
| • |
German
American's proxy statement in connection with its 2005 annual meeting
of
shareholders filed with the SEC on March 29,
2005;
|
| • |
German
American's Current Report on Form 8-K filed with the SEC on
March 22,
2005;
|
| • |
German
American's Current Report on Form 8-K filed with the SEC on March
23,
2005;
|
| • |
German
American's Current Report on Form 8-K filed with the SEC on April
7,
2005;
|
| • |
German
American's Current Report on Form 8-K filed with the SEC on May 2,
2005;
|
| • |
German
American's Current Report on Form 8-K filed with the SEC on May 4,
2005;
|
| • |
German
American's Amendment No. 1 to Current Report on Form 8-K filed with
the
SEC on May 4, 2005, which amends German American's Current Report
on Form
8-K filed with the SEC on September 28,
2004;
|
| • |
German
American's Current Reports on Form 8-K filed with the SEC on May
24,
2005;
|
| • |
German
American's Current Report on Form 8-K filed with the SEC on June
28,
2005;
|
| • |
German
American's Current Report on Form 8-K filed with the SEC on August
2,
2005;
|
| • |
German
American's Quarterly Report on Form 10-Q for the quarter ended March
31,
2005;
|
| • |
German
American’s Quarterly Report on Form 10-Q for the quarter ended June
30,
2005; and
|
| • |
The
description of the common stock of German American included under
the
heading "Description of German American Capital Stock" in the
Prospectus/Proxy Statement contained in German American's Registration
Statement on Form S-4 (File No. 333-16331) filed November 11, 1996,
as
amended.
|
|
Article
I. TERMS OF THE MERGERS & CLOSING
|
5
|
|
Section
1.01. The Holding Company Merger
|
5
|
|
Section
1.02. Effect of the Holding Company Merger
|
6
|
|
Section
1.03. The Holding Company Merger - Conversion of Shares
|
6
|
|
Section
1.04. The Holding Company Merger - Cancellation of Options
|
8
|
|
Section
1.05. The Bank Merger
|
8
|
|
Section
1.06. The Closing
|
8
|
|
Section
1.07. Exchange Procedures; Surrender of Certificates
|
8
|
|
Section
1.08. The Closing Date
|
9
|
|
Section
1.09. Actions At Closing
|
9
|
|
Article
II. REPRESENTATIONS AND WARRANTIES OF PCB AND PEOPLES
|
11
|
|
Section
2.01. Organization and Capital Stock
|
11
|
|
Section
2.02. Authorization; No Defaults
|
12
|
|
Section
2.03. Subsidiaries
|
12
|
|
Section
2.04. Financial Information
|
12
|
|
Section
2.05. Absence of Changes
|
13
|
|
Section
2.06. Absence of Agreements with Banking Authorities
|
13
|
|
Section
2.07. Tax Matters
|
13
|
|
Section
2.08. Absence of Litigation
|
13
|
|
Section
2.09. Employment Matters
|
13
|
|
Section
2.10. Reports
|
14
|
|
Section
2.11. Investment Portfolio
|
14
|
|
Section
2.12. Loan Portfolio
|
14
|
|
Section
2.13. ERISA
|
15
|
|
Section
2.14. Title to Properties; Insurance
|
17
|
|
Section
2.15. Environmental Matters
|
18
|
|
Section
2.16. Compliance with Law
|
18
|
|
Section
2.17. Brokerage
|
18
|
|
Section
2.18. Material Contracts
|
18
|
|
Section
2.19. Compliance with Americans with Disabilities Act
|
19
|
|
Section
2.20. Statements True and Correct
|
19
|
|
Section
2.21. PCB's Knowledge
|
19
|
|
Article
III. REPRESENTATIONS AND WARRANTIES OF GERMAN AMERICAN AND
FIRST
STATE
|
19
|
|
Section
3.01. Organization and Capital Stock
|
20
|
|
Section
3.02. Authorization
|
20
|
|
Section
3.03. Subsidiaries
|
21
|
|
Section
3.04. Financial Information
|
21
|
|
Section
3.05. Absence of Changes
|
22
|
|
Section
3.06. Reports
|
22
|
|
Section
3.07. Absence of Litigation
|
22
|
|
Section
3.08. Absence of Agreements with Banking Authorities
|
22
|
|
Section
3.09. Compliance with Law
|
22
|
|
Section
3.10. Brokerage
|
23
|
|
Section
3.11. Statements True and Correct
|
23
|
|
Section
3.12. German American's Knowledge
|
23
|
|
Article
IV. COVENANTS OF PCB AND PEOPLES
|
23
|
|
Section
4.01. Conduct of Business
|
23
|
|
Section
4.02. Subsequent Discovery of Events or Conditions
|
27
|
|
Section
4.03. Shareholder and Other Approvals; Cooperation
|
27
|
|
Section
4.04. SEC Registration Matters
|
28
|
|
Section
4.05. Environmental Reports
|
28
|
|
Section
4.06. Rule 145 Restrictions on Resales
|
29
|
|
Section
4.07. Access to Information
|
29
|
|
Section
4.08. Cooperation in Connection with Termination of Certain
Executive
Agreements and Exercise of Stock Options
|
29
|
|
Section
4.09. Permitted Payments and Dividends
|
29
|
|
Article
V. COVENANTS OF GERMAN AMERICAN AND FIRST STATE
|
30
|
|
Section
5.01. Regulatory Approvals and Registration Statement
|
30
|
|
Section
5.02. Subsequent Discovery of Events or Conditions
|
30
|
|
Section
5.03. Consummation of Agreement
|
31
|
|
Section
5.04. Preservation of Business
|
31
|
|
Section
5.05. Representation on First State Board
|
31
|
|
Section
5.06. Appointment of New First State Officer
|
31
|
|
Article
VI. CONDITIONS PRECEDENT TO THE MERGER
|
34
|
|
Section
6.01. Conditions of German American's Obligations
|
34
|
|
Section
6.02. Conditions of PCB's and Peoples' Obligations
|
35
|
|
Article
VII. TERMINATION OR ABANDONMENT
|
37
|
|
Section
7.01. Mutual Agreement
|
37
|
|
Section
7.02. By Unilateral Action
|
37
|
|
Section
7.03. Shareholder Approval Denial
|
37
|
|
Section
7.04. Adverse Environmental Reports
|
37
|
|
Section
7.05. Termination Upon Adverse Regulatory Determination
|
38
|
|
Section
7.06. Regulatory Enforcement Matters
|
38
|
|
Section
7.07. Lapse of Time
|
38
|
|
Section
7.08. Effect of Termination
|
38
|
|
Article
VIII. MISCELLANEOUS
|
39
|
|
Section
8.01. Liabilities
|
39
|
|
Section
8.02. Expenses
|
39
|
|
Section
8.03. Notices
|
40
|
|
Section
8.04. Non-survival of Representations, Warranties and
Agreements
|
40
|
|
Section
8.05. Representations Not Affected by Review
|
41
|
|
Section
8.06. Press Releases
|
41
|
|
Section
8.07. Entire Agreement
|
41
|
|
Section
8.08. Headings and Captions
|
41
|
|
Section
8.09. Waiver, Amendment or Modification
|
41
|
|
Section
8.10. Rules of Construction
|
41
|
|
Section
8.11. Counterparts
|
41
|
|
Section
8.12. Successors
|
41
|
|
Section
8.13. Governing Law; Assignment
|
41
|